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Australia shares see best day in 2 months; energy stocks power gains

Mon, Aug 19, 2019 - 3:05 PM

PHOTO: EPA-EFE

[BENGALURU] Australian shares gained the most in two months on Monday, powered by energy firms and heavyweight financial stocks, as expectations of more stimulus in major economies helped ease global recession worries.

The S&P/ASX 200 index closed 1 per cent higher for its best session since June 19 at 6,467.40 points.

All three major US stock averages had ended higher on Friday as an ebbing bond rally and news of potential German economic stimulus brought buyers back to the equities market.

Global stocks were shaky for most of last week as Sino-US trade tensions and fears of a recession sparked by signals from the US bond market kept investors on the edge.

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But sentiment picked up a bit on Monday after US President Donald Trump said he had discussed the impact of Washington's tariffs on Chinese goods with Apple chief Tim Cook, sending US stock futures higher. Mr Trump said Mr Cook "made a good case" that tariffs could hurt Apple and not some of its competitors.

The energy sub-index closed 2.2 per cent higher as crude prices rose following a weekend attack on a Saudi oil facility by Yemeni separatists.

Beach Energy Ltd led the sector's gains, putting on nearly 11 per cent, after the oil and gas explorer reported a whopping 86 per cent rise in its full-year underlying net profit after tax.

The financials subindex climbed as much as 1.1 per cent, with all the "Big Four" lenders finishing the session higher in the range between 0.7 per cent and 1.6 per cent.

The No 2 lender Westpac Banking Corp finished 0.8 per cent higher, after it reported a rise in the number of people missing mortgage payments amid a sluggish economy and a soft housing market.

Construction firm Lendlease Group ended the session about 11 per cent higher after it said it has attracted "a good level" of interest from prospective buyers for its underperforming engineering and services business, which dragged down full-year profit.

Meanwhile, the metals and mining stock index retreated 0.7 per cent as a drop in prices of safe haven gold led to heavy declines among the miners of the yellow metal.

Major gold firms Newcrest Mining Ltd and Evolution Mining Ltd lost about 3 per cent each.